"Where does all the money go to?"

Pensions: http://www.businessweek.com/ap/2012-06-19/university-of-cali... (That's one article about one university system, but most others face similar issues.)

I've said it before and I'll say it again: College has become the most effective means of wealth transfer from Generation Y kids to the Baby Boomers...financed by the government, of course.

The University of California system has actually decreased its per-student spending in real terms by around 25% over the past 20 years, so there isn't really a case of where the money has gone there (they never got it!). It's true that there are likely to be future problems with pensions, but they don't at all explain the current increases in tuition. Those are due to state funding cuts.

More specifically, if you take the total UC system budget and divide by the total student population, the result for 1990 (inflation-adjusted) was $21,000 spent per student. The result today is $16,500 spent per student.

Tuition has gone up anyway, because taxpayers stopped funding it faster than that rate of per-student cost decline. In 1990, state funding amounted to $16,000 per student (inflation-adjusted) out of the $21,000 total cost, leaving $5000 to be made up by tuition, donations, and other sources of income. Today the state contributes only $9,500 per student, and is in the process of cutting that to $8,500. So even with a more frugal $16,500-per-student cost, that now leaves $8000 to be funded out of non-state funds. So it's not surprising that tuition has gone up significantly.

No, Social Security wins that title.

I heard a report on NPR once that mentioned that the increase in "administrators" has been the major driving force in the increase in tuition. The system, hiring its own graduates in order to fudge the employment rate while increasing the cost of tuition to pay for those administrators, seems like a clear Ponzi scheme.

That's the most infuriating part of it, and lines up with my own experiences in university. During my years there tuition exploded, but the faculty saw little to no additional hiring, and certainly our profs weren't getting major raises.

Instead the administration exploded, with new assistants and managers appearing every day. The worst part was that it was still impossible as a student to get anything done. It took me literally 6 months to reschedule an exam (through processes clearly spelled out by school regulations, in fact). This was at the University of Waterloo, FWIW.

In the end I had to threaten to sue the school to get them to do anything. In hindsight, it was entirely an empty threat, but it seemed to get me on an escalation chain somewhere. It took an additional month to get the exam set up.

I have zero respect for the administration at my alma mater, nor any institution of higher education. As far as I am concerned, they are all leeches, subsisting off the good will and good work of the profs, post-docs, TAs, and students who are actually doing anything.

"The bureaucracy is expanding to meet the needs of the expanding bureaucracy" - to this date the post-secondary education system is the most egregious example of this quote I've ever had the displeasure of dealing with.

What do university administrators do? Schools seem relatively simple to manage, since most of the labs are small scale enough to run themselves, with the university providing some basic infrastructure.